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Renters, Fight for Your Rights!

Times have been tough for apartment-dwellers. The real estate boom has given many homeowners a great deal of free money, while tenants have gotten only the typical annual increase in their rent. Yet even as home prices start to modestly descend, in many areas typical people with average income levels still have almost no chance to buy a home without potentially overextending their finances through a risky mortgage.

One of the most difficult things about apartment living is your lack of control over your environment. Even though it's nice not to have to pay extra for repairs and maintenance, it can be a real challenge to get your landlord to fix things in a timely fashion. Furthermore, when you decide to move out, it always seems that your landlord finds some sort of excuse to hang onto most or all of the security deposit you paid when you first moved in. What many tenants don't know, however, is that most states give them legal rights if their landlords fail to fulfill their obligations. By knowing your rights, you can make sure that your landlord won't take advantage of you.

Finding an apartmentIn some areas, just finding an affordable apartment is a challenge. Apartment applications can require as much information as mortgage applications, and competition can be fierce. Most landlords now require credit checks for applicants, and in most states, landlords can charge you an additional application fee just for considering letting you rent property. As large apartment REITs like AvalonBay Communities (NYSE: AVB) , Apartment Investment & Management (NYSE: AIV) , and Archstone-Smith Trust (NYSE: ASN) have replaced smaller individual landlords with just a few units, it's increasingly likely that you'll find rigid procedures you have to go through when renting an apartment.

While landlords have a lot of latitude in choosing their tenants, anti-discrimination laws often apply to limit their ability to make decisions based on certain factors, such as race or nationality. If you've think you've been discriminated against, check for fair housing councils in your area, or contact your state's housing department for information about potential legal remedies. In some cases, you can get monetary damages in addition to access to your desired property.

Signing a leaseOnce you decide on an apartment and have been accepted, it's time to sign a bunch of legal documents. Even though it may be tempting just to skip over the pages of fine print, reading through your lease is the best way to understand some of your rights. Most leases are form contracts based on your state's laws, and they address many common situations that come up.

In particular, it's important for you to document the condition your apartment is in when you first take possession. If there are problems, you have to let your landlord know immediately so that you won't be blamed for them later. Also, look closely at the provisions that govern what happens if you have to break your lease. Penalties can vary considerably, ranging from just a few hundred dollars to several months of rent. Even if you're planning to stay in your apartment for the entire lease term, you never know when unexpected circumstances may force you to change your plans.

Handling repair problemsIn general, landlords are usually responsible for any repairs, unless the tenants create the problems. It's up to you to contact your landlord if there's a need for repairs. If your landlord fails to make repairs, you may have a number of options. If the problem is severe and poses a threat to health or safety, you may be able to arrange for repairs yourself, then deduct the amount you have to pay from your rent. If problems are bad enough, you may even be able to abandon your apartment and stop paying rent.

It's important to understand that many of these remedies apply only in situations in which there's a really huge problem. You shouldn't, for instance, expect to be able to move out rent-free just because your garbage disposal doesn't work, or because you've got a small leak in your bathroom faucet. If your heat goes out during winter, on the other hand, that's probably enough of a problem to warrant more drastic measures.

Security depositsState law usually specifies that you must receive your security deposit back within a certain period of time after you move out. Of course, in order to get paid, you have to let your landlord know your new address. Typically, if your landlord takes any deductions from your security deposit, you're entitled to an explanation.

If you disagree with these deductions or don't get your deposit back at all, first write a letter to your landlord formally requesting payment in full, and stating any concerns or disagreements you have about the way you've been treated. It's best to make this letter as professional as possible, leaving out any personal attacks or emotional responses. If your landlord fails to respond to your letter, you may be able to go to small claims court to get your security deposit back. Some laws provide for additional damages above and beyond the amount of your deposit, if you can show that your landlord acted in bad faith.

As a tenant, it's easy to feel powerless. However, tenants have legal rights that give them a significant amount of power in dealing with landlords. If you have a problem with your landlord, don't just automatically give in; consider your alternatives and stand up for your rights.

Fighting for your rights is just one way you can cut down on unnecessary expenses. For more ideas on cutting costs and making more from your money, try out our personal-finance service, Motley Fool GreenLight, free for 30 days.

Fool contributor Dan Caplinger has dealt with a bunch of landlords over the years. He doesn't own shares of the companies mentioned in this article. The Fool's disclosure policy won't evict you.

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Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.
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